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Asian economies need to build on their basic strengths to pave the way for recovery and sustainable growth, the Chief Executive, Mr Tung Chee Hwa, has told a World Economic Forum (WEF) Plenary Session in Davos.

Speaking at a session 'What Conditions for a Renewed Asian Miracle', Mr Tung said there was no magic policy which would help Hong Kong and other Asian economies through their current difficulties.

"We need to constantly go back to the basics," he said.

"Continued prudent fiscal management; a sound and robust banking system; a government which is accountable to the people and understands what the people worry about; sound macro-economic policies; the rule of law; education; grooming human resources for a knowledge-based economy.

"These are many of the fundamentals we are tackling in Hong Kong. I know they are tackling them in all other countries in Asia.

"I have every confidence that countries in Asia, with different speed, will come to grips with all these problems."

Joining Mr Tung during the Plenary Session were Singapore's Senior Minister Lee Kuan Yew, former secretary-general of Japan's Liberal Democratic Party Koichi Kato and PepsiCo Inc chairman Roger Enrico. The session was chaired by WEF managing director Claude Smadja.

Mr Tung told more than 400 WEF delegates at the session that Asia's economies had grown because they had embraced international trade.

He said import and export growth of between 10 to 15 per cent, and GDP growth of about 7.5 per cent, over the past two decades had brought Asia to the heart of the global economy.

"Before the turmoil started in 1997 Asia actually accounted for 26 per cent of world exports and 24 per cent of all imports," he said.

"You know these figures made Asia a significantly bigger importer than the United States, which accounted for just 14 per cent."

Mr Tung pointed out that six Asian economies accounted for 37 per cent of the world's non-gold reserves; that China's economy of US$900 billion was now the world's sixth-largest and that despite faltering growth Japan's economy was twice the size of Germany's.

"I wanted to mention these figures just to highlight the importance of Asia," Mr Tung said.

"Because if Asia goes completely out, if the lights are switched off, the impact on the global economy would be really unthinkable."

In another full day of engagements, the Chief Executive held a breakfast meeting with a group of chief executives from major international corporations and attended a lunch for Asia leaders hosted by the Federal Council of Switzerland.

Mr Tung took part in another World Economic Brainstorming session with political figures and some of the world's most influential business leaders, and also spoke with more than 45 international media leaders.

A bilateral meeting was held with European Central Bank president, Dr Wim Duisenberg.

Mr Tung said his three-day visit to Davos for the annual WEF - the first by a head of government from Hong Kong - had been 'very interesting and productive'.

Mr Tung said he had been able to explain to a wide audience - businessmen, academics, government officials, news media - Hong Kong's short and long-term measures to deal with the financial crisis.

"I think the visit has been helpful for all our friends overseas to understand what we have done and what our long-term visions are," he said.

"And I would say that almost without exception everybody is very supportive of all the measures we have taken."

Mr Tung said that during meetings with American officials - who included Deputy Secretary for the Treasury Larry Summers - he stressed the importance of Hong Kong's active participation in the designing of new global financial architecture.

Mr Tung leaves Davos later today (Sunday, HK time) for Israel, where he will call on political leaders and look at how high-tech industries have developed in the country.

End/Sunday, January 31, 1999

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Photo Caption: The Chief Executive, Mr Tung Chee Hwa, makes a point during a World Economic Forum Plenary Session 'What Conditions for a Renewed Asian Miracle?' in Davos (Saturday, Davos time). On CE's left is PepsiCo Inc chairman Roger Enrico while on his right is session moderator and WEF managing director Claude Smadja.